The media timescale at the crossroads

Film professionals recently announced there was to be no change to “media chronology”, the order in which film products are made available via various media. It is hard to see how this position, which goes against changes in technology and consumer practices, could be tenable.

Summary

The media timescale refers to the periods that elapse between the release of films in cinemas and their circulation on other media like DVDs, Blu-ray, VOD and television. The advent of television and subsequent videos prompted the public authorities to intervene by allocating “release windows” to the various players in the cinema business to avoid unfair competition between them. France is a special case in this regard in having this timescale largely determined by the public authorities (by law, decree, order, etc.). The distributor Ad Vitam recently discovered this to its cost with respect to the film by Amos Gitaï Roses à crédit. This feature film was originally scheduled to be aired on France 2 in early 2011, but the director wanted his film to come out in cinemas before that date. The CNC pointed out that it was not possible for a film that had been shown in cinemas to appear on a television channel a few weeks later.

The chairman of the CNC approvals committee, Frederic Brillion, stated at the time: “We cannot agree that a film can be broadcast on a non-payment channel only three months after its cinema release. If the media timescale were to be called into question, the whole cinema industry would be condemned to death.”[+]NoteLe Monde, 9 December 2011, p.26.[1]This seems to demonstrate that in France there is no room for improvisation or experiment with the media timescale.

Nonetheless, the television channels still found original ways of getting round the timescale. Recently, the latest production by Olivier Assayas, Carlos, served as a trial run to demonstrate that it is fairly simple to ignore the timescale regulations. The film was first broadcast in a longer version on the Canal+ channel before its cinema release in a shortened version. The long version was accordingly broadcast on the encrypted channel in May 2010, while being available via the station’s “Catch-up TV” channel before it came out on DVD at the beginning of June 2010.

The short version had its cinema release on 7th July 2010; consequently it came under the media timescale regulations. Beyond the ingenuity of the television channels, the appearance of new actors and new film consumption methods bring pressure to bear on the media timescale, so the increase of film piracy on the Internet[+]NoteThe recent closure of Megaupload does not put an end to piracy which always springs back with fresh and yet more comprehensive offers.[2] and the increase of aggressive VOD subscription offerings, like what is on offer from Netflix - which reckoned to have 26 million subscribers throughout the world in 2011 - might suggest that the media timescale will have to adapt to social developments.

The fact is that piracy, by its very definition, challenges the timescale periods (the film titled Drive, for example, was available in high definition several weeks before its release on DVD, Blu-ray and VOD on 8th February). As regards the operators offering flat-rate subscriptions to access a catalogue of films in VOD (SVOD), these are severely handicapped by the timescale allowing them to offer only films whose cinema release goes back at least 36 months. In the light of all this, one may well wonder if it is advisable to stick to this rigid media timescale. A few days ago, the CNC organised a meeting with the professionals in the film industry to determine whether, as provided in the Order dated 9th July 2009, the media timescale should be changed. It transpired from this meeting that there was a preference for the status quo, an outcome which is somewhat puzzling.

Faced with this widely criticised timescale, various solutions can be considered. Although it may not seem very desirable to revoke the regulations on the media timescale, there are nevertheless fresh arrangements that could be introduced.

Criticisms of the media timescale

The legal status of the media timescale can be summarised in the table below:

Film rights holders cannot escape from this complex arrangement by reducing the time periods. It is however possible for them to lengthen them ( it might be noted that the distributors do not fail to make use of this facility). The purpose of the media timescale is to provide the movie theatres with the exclusive right to show films and, subsequently, to allow the DVD distributors and VOD operators to enjoy their window ahead of the television channels. Quite clearly, the various operators in the film business, and the broadcasters too, are out to achieve profitability for their films without being cannibalised by the others. What would the future of the movie theatres be, if a film was released the same day in cinemas, on VOD and on DVD?

It is often said that France is one of the rare countries where the media timescale is fixed by the public authorities. It would actually be truer to say that in France the public authorities take part, along with the protagonists in the film industry, in laying down the rules. Accordingly, the timescale that determines the release of films on VOD and their airing on television is certainly the result of an order by the Ministry of Culture dated 9th July 2009, but in fact this order does no more than officialise a trade agreement which a large part of the film industry had signed up to. The report produced by Mr Michel Thiolliere on behalf of the Senate Cultural Committee on the law dated 12th July 2009 states “Today, the media timescale system has been established in a consensual manner, taking account of the commercial strategy of the rights holders and the fact that all the operators in the industry must contribute to financing film creation and production.”

In the case in point, the role of the minister was to make mandatory an agreement, for the members of the film business, that would commit the signatories alone. This method marries up the contractual approach with unilateral action and harks back to the financing practices used by television channels for raising finance for films[+]NoteOn this issue, Marc LE ROY, Le Cinema: JurisClasseur administratif, section No. 267, § 17 to 19.[3]. It seems difficult, under the circumstances, to claim that the media timescale is set down in a one-sided, authoritative manner by the administration alone. As regards the use of physical media (DVD, Blu-ray, etc.) the release windows are laid down in the law dated 12th July 2009 and by a decree dated 22nd April 2009 (see table above). Nonetheless, the period of four months laid down by the law simply picks up the first proposal in the Oliviennes report submitted to the Minister of Culture and Communications on the development and protection of cultural works on the new networks. This proposal to shorten the time periods was signed by 47 representative members of the film industry and was picked up, on this basis, by the legislature. This is, once again, a long way from the high-handed approach often said to be the rule concerning the media timescale in France.

Furthermore, the media timescale is often criticised for not offering windows corresponding to the realities of the market. Some DVD publishers or VOD companies not affiliated to television channels would like to be able to offer films shortly after, or even at the same time as the screenings so as to compete with the movie theatres with an alternative to going out to the cinema. Nevertheless, the media timescale is regularly updated to adapt to societal developments. The period 2009-2010 was accordingly characterised (as indicated in the table above) by a thorough makeover, with a considerable reduction in the time periods. The sale and rental of DVDs dropped from 6 to 4 months after cinema release while one-off VOD rentals fell from 33 months to 4 months.

Pay television services are now able to air a film 10 months after cinema release instead of 12, as was previously the case. As noted above, the Order dated 9th July 2009 provides for the possibility of renegotiations between the members of the industry every two years. This being the case, it seems hard to claim that these rules (called for, let us remember, by a large part of the members of the industry) belong to another day and age.

Despite all this, it is still possible to assert that the media timescale is not perfect and, although called for by most members of the industry, it should be revised. It is indeed possible to consider certain more or less radical modifications.

The big bang theory or the temptation to do away with the media timescale altogether

It may well be considered that the public authorities have no role to play in establishing the media timescale. Although the executive and the legislature only become involved to officialise what the representative bodies themselves wish, why not leave it to each protagonist to determine its own timescale rules under contracts entered into by each film rights holder and the various screening and distribution operators? In other words, couldn’t the public decisions just be set aside and allow supply and demand to govern the timescale arrangements?

This is the situation that exists in most industrialised countries, in the United States, to begin with, the land of cinema and the free market. Curiously enough, the media timescale rules largely applied in that country are hardly different from our own. In the USA, film producers fix their own rules under contracts with the movie theatres, the distributors and the VOD operators. As it happens, the Motion Picture Association of America (MPAA) noted that, on average, the time lapse between the cinema release of a film and its appearance on physical media was 4 months, as in France.

As regards the appearance on VOD, the time lapse – between 5 and 5 and a half months - was even longer than that in France. The gap between DVD and VOD release has since dwindled, and in 2011 disappeared completely. For broadcasting on Pay TV, the lapse is between 270 days and one year and, on the Free-to-View channels, between 2 and 3 years. As a result, it is curious to observe that the media timescales are substantially the same despite the organisational differences. This says a great deal about the power of the lobbies in the film industry. In the United States, like in France, the producers, the operators and the television channels have made their voices heard and agreed on the time periods that appear most profitable all round.

Several examples illustrate this state of affairs. In 2006, the American director Stephen Soderbergh signed a contract with a production company (HDNet) to shoot a series of six films to come out simultaneously in movie theatres, on pay television and DVDs (the first of the six was known as Bubble. and came out in 2006). The experience must have been unsatisfactory as the next Soderbergh film based on this enterprising scheme is yet to come out. It is not certain that the broadcasting schedules provided for any attractive business plan. Another interesting case occurred in several countries, in particular in the United Kingdom: the announcement by Disney of a shortened time lapse between the cinema release window and the DVD window. At the time the Tim Burton film Alice inWonderland was released, Disney announced that the cinemas would only have 12 weeks exclusivity (instead of 17) before the release in DVD.

Several movie theatres consequently decided not to show the film before an agreement was reached. The Disney company imposed this new timescale in several countries but not in France because of our timescale laid down under the law dated 12 June 2009.

Bubble TV - Le grand Web Ze

These two developments say a great deal about the future of the media timescale. Negotiation and freedom of choice for producers to fix their own timescales seem unavoidable, including in France. Nevertheless, the timescale can only evolve if the business model of films does too. In other words, if new consumption patterns, particularly VOD, can help to make up for cinema attendances (unlike France, US attendances fell in 2011) there is no doubt that that the timescales will evolve. In the United States, the matter has never been so topical. More and more trials have been conducted and the producers are beginning to realise that VOD can be a very profitable source of earnings for a film. The real question remains whether it is in the general interest to shorten the timescale even if this means finding alternative financial compensation for the operators.

It should be remembered that the decree dated 12th November 2010 on audiovisual on demand servicesprovides that VOD and SVOD services that post a turnover of more than 10 million should contribute to the financing of European, French language cinema and audiovisual productions. The predictable explosion of VOD and SVOD services will require a re-think and a readjustment of French cinema funding, which is currently highly dependent on Canal+ participation. The appearance of new powerful players (like Netflix) in the subscription VOD domain is likely to bring about changes in the timescale rules. The time has accordingly come for France to get achieve flexibility in establishing the media timescale in order to enable trials to be run, the only way to establish whether new business models are possible and viable.

The preferred solution of greater flexibility

As a result of a meeting organised by the CNC at the end of January, it appears that the timescale is not likely to evolve in the near future. The operators in the film industry expressed the wish that there should be no change. However, several spoke out in favour of changes. Amongst the signatories of the agreement, where renegotiation was the subject of the CNC meeting, Arte and Orange were in favour of relaxation. Along similar lines, the ARP (Society of authors-directors-producers) and the SACD (Society of Dramatic Authors and Composers) which are not signatories to the agreement, have publicly expressed the wish that waivers and trials would emerge on timescale issues. We feel that changes are in order in two areas: films which are little shown and subscription VOD.

A recent survey by the CNC shows that about 40% of the films shown in cinemas are not released on DVD or on VOD either. 40% of the films shown in cinemas are not released on DVD or on VOD either.Shortening the timescale windows would mean giving another chance more quickly to films that did not make out in the cinema. The law, as it stands, does however provide for such shortening, as article 1 of the decree dated 22nd April 2010 allows for a CNC waiver to the usual 4 months for films achieving less than 200 admissions after 4 weeks screening. The waiver under this decree only covers videograms, but the order dated 9th July 2009 provides for its application to TVODs. The solution would be to make this possibility automatic without requiring the CNC’s agreement, which complicates matters unnecessarily. There will still be the need for an alternative to the 4 months provided for this kind of film.

At the present time, the decree provides that the CNC may not propose a reduction of the time period of more than 4 weeks[+]NoteSee point 1.3 of the agreement appended to the Order.[4]. It would be preferable to consider a greater reduction and this possibility could, arguably, be extended to a larger number of films. The ARP and the SACD have proposed availability in VOD just 2 weeks after cinema release and 22 weeks after release for SVOD (subscription VOD) for films screened in only 15 copies. In 2011, 180 French films came into this category.

Website of Arte TV

The Arte television channel has proposed an interesting development suggesting that an unencrypted channel which abides by its co-production commitments should be able to air a film 10 months after its cinema release if no broadcast on Pay TV is in the pipeline. This arrangement would have the advantage of promoting the television broadcasting of films of no interest to the Pay TV channels. At present, the Free-to-View channels are tied to a time period of 22 months before airing a film not shown on a Pay TV channel (see table above).

The most awkward and most topical problem concerns the availability of films on SVOD. The commercial media breakthrough of the new operators offering access to a considerable catalogue of films calls for some serious thought on their future availability timescale. The commercial media breakthrough of the new operators offering access to a considerable catalogue of films calls for some serious thought on their future availability timescale.The worldwide success of operators like Netflix has been based on the wide range of catalogue items, including, of course, a good number of recent films. There is quite clearly a robust future for this type of offering.[+]..... NoteThe upcoming appearance of “connected television” should bear this out. [5]

Under the law as it stands, the success of these operators is very doubtful on the French market because of the rules laid down by the trade agreement in the Order dated 9th July 2009, which supersedes and renders mandatory the trade agreement dated 6th July of the same year. This agreement was entered into for a period of two years and is tacitly renewable for periods of one year. The recent meeting of the signatories at the CNC is not likely to lead, as we indicated above, to any changes in the field of SVOD, as the signatories seem to consider that only TVODs should be promoted, by matching their window to the DVDs (4 months) as provided by the Order of 2009. The signatories believe that SVOD should continue to have a quite implausible time lapse of 36 months applied to it after cinema release. This being the case, it is difficult for an SVOD operator to make a worthwhile offer to the consumers, inasmuch as the films on the catalogue will have already appeared on DVD and TVOD and will have been aired on Pay TV and Free-to-View…

However, some signatories to the agreement (Canal+ with Canal+ infinity) are proposing subscription VOD or thinking about proposing it (M6, TF1). It must be acknowledged that they will consider their interests best served at present by putting their weight behind TVOD. It can be readily recognised that these operators will not welcome the arrival of new players (e.g. Netflix, or the videoclubs Videofutur, Free, Amazon) which could compete with them in terms of SVOD while reducing the attractiveness of TVOD. With a little imagination, one might enquire whether the 2009 Order might be found to be an anti-competitive practice under the Commercial Code or the European Treaty.

It is quite conceivable that the operators injured by this time period might bring proceedings on the issue in the administrative courts. A politician recently extolled the virtues of anti-competitive practices when they allow powerful national operators to be built up, and this is perhaps what is happening right now in the area of SVOD. It is not necessarily the case that the French SVOD operators will gain anything from this situation. One sure thing is that this cannot go on for ever and that a line-up of the availability window of films in SVOD on that of TVODs is simply a matter of time. This outcome will not be welcomed by the Pay TV channels or the publishers of DVDs.

At the end of the day, the appearance of SVOD means a new deal as regards the players in the film business (some are appearing already, others will disappear and some will become stronger, as already seems to be the trend in the United States), and this will necessarily bring about a radical change in the French business model.